BAK

JF-Expert Member

BAK

JF-Expert Member

GEITA Gold Mines (GGM) has paid out 200,000 US dollars (about 200 million/-) to Geita District as part of its contribution to local government development in the area as negotiations to improve other parts of the deal between the government and the country's second largest gold mining firm continues.

GGM Executive Director, Mr Hatibu Senkoro told 'Daily News' yesterday that his firm has decided to pay the amount while negotiations are on because the decision reached earlier by other stakeholders to contribute to local government is valid enough and does not require much haggling.

He said apart from the payments made, negotiations to review the Mining Development Agreement (MDA) and other issues pertaining to win-win situation on mining industry as observed by President Jakaya Kikwete are at advanced stages.

"Negotiations are at advanced stage and we hope if the trend remains the same we will soon conclude the deal as both sides are positive," said Mr Senkoro who is also the Anglo Gold's Country Manager. Anglo Gold is GGM'S parent company.

The Minister for Energy and Minerals, Mr Nazir Karamagi could not be reached yesterday for comments, but his Deputy, William Ngeleja said the government was happy with the on going negotiations and hoped to conclude the deal soon.

The government has been holding meetings with mining companies to review mining contracts for the benefit of both sides as well as the society.

The first mining firm to conclude a deal on a win-win situation negotiation with the government was Barrick Gold Tanzania Limited, the country's largest mining company owning four of the country's nine major mines. In total Barrick Gold owns properties in Tanzania with combined proven and probable reserves of about 17.4 million ounces of gold.

The government has been praised as having good mining incentives which have made the country attractive to mining companies, making it a hub of Foreign Direct Investment (FDI) on mining industry.

Augustine Moshi

JF-Expert Member

Augustine Moshi

JF-Expert Member

GGM Executive Director, Mr Hatibu Senkoro told 'Daily News' yesterday that his firm has decided to pay the amount while negotiations are on because the decision reached earlierby other stakeholders to contribute to local government is valid enough and does not require much haggling.

And what, may I ask, was the "decision reached earlier"? Does it specify how much GGM will contribute to local government, or do we get the contributions out of your sympathy? Are you required to pay or do you pay when and if you wish?

He said apart from the payments made, negotiations to review the Mining Development Agreement (MDA) and other issues pertaining to win-win situation on mining industry as observed by President Jakaya Kikwete are at advanced stages."Negotiations are at advanced stage and we hope if the trend remains the same we will soon conclude the deal as both sides are positive,"That, I submit, is a lot of hot air! What are these "other issues pertaining to win-win situation"? Even now we know that there is a win-win situation between GGM, Karamagi and a few others. When, may I ask, will we, the people, win anything other than empty words about "negotiations being at an advance state"?

The government has been holding meetings with mining companies to review mining contracts for the benefit of both sides as well as the society.

So, there are "both sides" in addition to "society" here? One side, I assume, is the one that secretly signs the contracts in hotel rooms (in between drinks, presumably), and the other side is mining companies. We are, ofcourse, mere "society".

The first mining firm to conclude a deal on a win-win situation negotiation with the government was Barrick Gold Tanzania Limited.

Do not upset my tummy! What did WE win? Or, I get it, you really do not have US a a side at all! One side has Karamagi, the other has Barrick, and we do not count at all! Once Barrick and Karamagi win, then it is a win-win situation!

The government has been praised as having good mining incentives

Who has praised the government? Not us, and we ought to have been the ones that counted most. The mining companies have certainly been very happy with the government. They have a deal that enables them to cart away $700 mil worth of gold each year and pay only 3% OF THE PROFIT to us. But ofcourse even these companies must be wondering how stupid some people can be. Only the most foolish of governments would let you dig holes in their country, use mercury, cyanide and other environment damaging compounds to extract their gold and pay them only 3% of the profit for all that!

G.MWAKASEGE

Senior Member

G.MWAKASEGE

Senior Member

BY the grace of God, Tanzania is a country endowed with vast and abundant natural resources, perhaps rivaled by only a few among its neighbours and the rest of the African continent. It is covered with great agricultural land and wildlife; awash with enormous water bodies complete with a complexity of aquatic and marine life; and the land is replete with an unquantifiable variety of precious minerals. Yet in terns of economic growth, Tanzania is one of the Least Developed Countries and among the poorest in the world, in terms of income disposable to its people and other economic indicators.

The country is also beset by other serious development challenges such as poor health; its people are dying young due to poverty and ailments while many lives of its children and women are lost annually through avoidable or preventable antenatal health challenges.

However, Tanzania's leaders say they have been trying hard to pull the country from this intractable quagmire. The country has embraced serious economic reforms since the 1980s, believing that the impact of those reforms would eventually stimulate economic development through the trickle-down effect, and bring a better life to the ordinary population.

But we believe that apart from ongoing efforts, certain things need to be done, including more reforms, to enable this country make the best use of its natural resources to advance her socio economic development. And one such area that needs further reforming is the mining sector.

Yesterday, this paper ran a front-page story revealing that the country's largest gold mines paid a combined total of $258.8m (approx. 336bn/-) to the government in all royalties and taxes since 1998. The mines included in this analysis are those mainly owned by multi-national companies including Resolute Limited, Ashanti Goldfields, AngloGold and Barrick Gold Corporation. At the same time, they were reported to have exported out of the country gold worth more than $2bn (over 2.6 trn/-) since they began serious operations in the late 1990s.

In the meantime, the country's major brewer, Tanzania Breweries Limited (TBL) paid taxes amounting to 472bn/- between 1997 and March 2005, a figure much higher than the combined amount paid by the six largest gold mines!

These figures speak volumes in terms of analyzing the way in which our natural resources are being utilized to further national development and rid this country out of the squalor of poverty. It is unconceivable that Tanzania should be earning more money out of beer as compared with gold; and definitely something must be wrong somewhere.

We think a review of the mining sector is necessary; because as the things stand now, something seems amiss with taxation in the mining sector, and its contribution to national development is way long incommensurate with the sector's true potential. While we support President Kikwete's directive on renegotiating new mining contracts, we think the efforts should go a step further by reviewing the whole mining sector with a view to coming up with a new mining policy that would bring about the desired win-win situation between the government and the investors.

We believe this country can make gigantic leaps in her development endeavors if only these abundant natural resources, including gold, are utilized in a more effective manner to bring about national development. A country so endowed with natural riches does not deserve to be this poor.

Augustine Moshi

JF-Expert Member

Augustine Moshi

JF-Expert Member

Judy asks whether we cannot invest (I guess she means own) at least one of the mines. We can, Judy! We used to own all mining activities in the country. Trouble was, we owned them under a socialist policy that knew not how to produce. It only knew how to distribute. This only worked until there was nothing more to distribute, and the rest, as they say, is history.

We need technology and capital. We need only to co-own the mines. What we don't need is this present practice of giving us royalty rather than part ownership. It is entirely possible for us to insist on, and get, part ownership. Botswana splits all the diamonds it produces with De Beers. Venezuela was in a mess like us, until Hugo Chavez showed up. He ordered a review of the mining contracts, with the explicit order that Venezuela would not accept anything less than 30% of the wealth produced in any operation.

It is possible to truly benefit from our mineral wealth, but we will need to have leaders that have the national interest at heart first. The current crop of our national leaders has been bought by the mining companies. They will continue to pretend that they are getting us a better deal, but I assure you that anybody who takes several years to negotiate the review of a mining contract, and does so in great secrecy, is playing games only.

Mtanganyika

JF-Expert Member

Mtanganyika

JF-Expert Member

I'm total against government ownership of any industry, because through history government had never control anything and maintain maximum efficiency. I also believe there is nothing wrong for this mineral sector to be owned by private sector, however I'm against the contract and tax brackets that give most of this companies free lunch.

JK and his cabinet are strong needed to review all contracts, and imposed reasonable tax that will benefit both side. From government sources it seems Tanzania has impose fixed tax to this companies, which is total wrong. What we need is progressive tax, the more they make the more tax we collect, this is all over the world. Tax brackets is not something new.